Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology
The state of cryptocurrency in Western Sahara is complex. Western Sahara is the largest UN-recognized, non-governing territory, currently under the territorial control of Morocco, despite ongoing movement for independent sovereignty.
Generally, cryptocurrencies are banned outright in Algeria, Iraq, Morocco, and Libya. However, the general prohibition appears to be loosening to a degree with respect to Morocco and Western Sahara. In 2018, Morocco hosted a blockchain summit. Additionally, a New York-based private equity firm, Brookstone Partners, is set to build a wind farm to mine bitcoin in Western Sahara.
In July 2018, Bloomberg reported that Brookstone Partners acquired the rights to the development. Managing General Partner at Brookstone Michael Toporek said, “We have exclusive rights to the area for a wind farm.” Following the acquisition, Brookstone founded Soluna Technologies to develop the wind farm, and on July 27, Soluna announced that it was “building a wind-powered blockchain computing infrastructure in Morocco, to bring a clean, and sustainable alternative to the current cryptocurrency mining approach.”
Despite these steps, the wind farm remains controversial. According to Western Sahara Resource Watch (WSRW), there is a concern about Brookstone developing the project on occupied land, a reference to the ongoing conflict between Western Sahara and Morocco regarding sovereignty.
Specifically, Sara Eyckmans, WSRW Coordinator, criticized the press release’s language: “Dakhla is not at all situated in Morocco. It is situated on land under foreign military occupation. Any agreement that Brookstone has signed with the Moroccan government for the particular area is thus null and void.”
For the foreseeable future, it appears that the embrace of cryptocurrency and blockchain in Western Sahara will be embroiled in the Western Sahara-Morocco conflict.
P.S. Insights on Cryptocurrency Legal Issues
Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.
Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.
However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.
Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency. The globe below provides links to country-by-country summaries: